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Wicker: Lame Duck Congress Must Prevent Disastrous ‘Fiscal Cliff’
Massive Tax Hikes, Drastic Defense Cuts Are Unacceptable Consequences
Monday, October 22, 2012
The
absence of leadership from President Obama and Senate Democrats has left many
of the country’s most pressing problems unresolved. Two major issues –
preventing huge tax hikes and replacing debilitating defense cuts – need action
before the end of the year.
Rather
than consensus, political posturing by Senate Majority Leader Harry Reid has
pushed tough decisions to the final hour – irresponsibly allowing the fate of
our country’s financial future and millions of American jobs to hang in the
balance. Despite a grim economic forecast, recent reports indicate the
President is willing to use his veto power to force tax hikes.
Crippling Tax Hikes
Worries
are rising among families and small businesses about whether they will face a
hefty tax increase next year. According to the nonpartisan Tax Policy
Center, nearly 90 percent of Americans will be affected by higher rates, and
the average rise per household would be about $3,500. Tax hikes have an
adverse impact on economic growth. Job creators who want to hire and
invest are discouraged by persistent uncertainty in Washington.
Putting
our country on sound fiscal footing is a priority that should be taken
seriously and with timely and careful deliberation. The fact that Senate
Democrats have neither passed a budget in more than three years nor a single
appropriations bill this year reveals the majority party’s failure to address
the government’s spending problem. Moreover, when presidential leadership
was needed, the White House rejected proposals offering meaningful budget
savings and ways to address the biggest drivers of federal spending.
Rising to the Challenge
It is
important to remember that the automatic, across-the-board budget cuts known as
sequestration are part of a drastic fallback plan that was never supposed to
happen. Sequestration would be particularly devastating to our national
defense. We must ensure our military is the best-equipped and most
professional fighting force in the world. Unless the defense cuts are
changed, our military readiness to deter threats and defend our priorities
would be compromised. America would be left with the smallest Navy since
World War I.
A Looming Recession
The
stakes are high as the so-called “fiscal cliff” of tax hikes and meat-ax cuts
quickly approaches. If Congress does not act to change existing policy,
the impact would have a disastrous effect on the economy. The
Congressional Budget Office has warned that another recession is imminent, and
credit rating agency Moody’s has threatened to downgrade America’s credit
rating – an action already taken by Standard and Poor’s last year.
A
credit downgrade is a significant setback because it represents shaken
confidence in the U.S. government’s ability to pay its bills. A drop in
confidence could prompt higher interest rates – increasing payments on the
federal debt by tens of billions of dollars – and further complicate the debt
crisis.
Preventing
the “fiscal cliff” from burdening Americans and wrecking the economy should be
at the top of the agenda during the lame duck session of Congress between
Election Day and the start of a new congressional calendar in January.
With bipartisan cooperation, we can avert disaster and begin the process of
lasting budget reform.
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